Applications open for highly competitive federal and state housing tax credits

MADISON – The Wisconsin Housing and Economic Development Authority is now accepting applications for the upcoming round of federal and state tax credits, which finance affordable workforce housing.

The application period for the highly competitive 2021-22 housing tax credit programs runs from Nov. 20, 2020 until Dec. 11, 2020. The application process covers federal 9% as well as state 4% and federal 4% tax credits estimated at a total of $31 million for the upcoming year.

This year’s application incorporates a series of changes developed through a robust public engagement process with developers and community members that included in-person and online meetings as well as an online public survey. The application gating document can be requested here.

“WHEDA appreciates the depth and breadth of knowledge our partners and stakeholders brought to the table as we modified our allocation plan to reflect Wisconsin’s evolving housing needs,” said WHEDA CEO Joaquín Altoro. “We intend to continue listening, learning and innovating as these needs change. Together, we are cultivating an ecosystem that expands equitable housing and economic opportunity throughout Wisconsin.”

Among the highlights of the 2021-22 allocation plan:

• A set-aside of 10% of state housing tax credits for developments that provide supportive services for hard-to-house individuals in at least 25% of the units. This provision expands the universe of organizations able to provide rental subsidies in these supportive units to include qualified for-profit organizations;
• A set-aside of 25% of state housing tax credits for developments in qualified rural areas;
• Increased scoring for sustainability features related to energy efficiency, public transportation and other environmental factors;
• Increased scoring for projects that include minority developers; and
• Introduction of a “cure period” during which developers may resubmit applications to fix errors that would otherwise result in rejection based on failure to meet minimum standards.

For the 2020 period, WHEDA awarded $31.9 million in federal and state tax credits to create 2,039 affordable housing units. The awards are supporting projects in 23 communities statewide; the application process drew requests totaling $61 million.

The 2021-22 Qualified Allocation Plan, prepared in accordance with Section 42(m)(I)(A)(i) of the Internal Revenue Code of 1986, goes beyond the statutory requirements established through Congressional mandates to address Wisconsin’s changing housing needs.

WHEDA has been the sole administrator for federal Housing Tax Credits in Wisconsin since the program was established in 1986. WHEDA implemented Wisconsin’s state Housing Tax Credit program in 2018. Since 1986, WHEDA has awarded more than $445 million in affordable Housing Tax Credits, resulting in the development and rehabilitation of more than 53,000 units of rental housing for low- to moderate-income families, seniors and vulnerable community members.

The programs do not provide housing subsidies. Rather, tax credits encourage developers to create affordable housing by offering a dollar-for-dollar reduction of income taxes owed by owners/investors in qualified projects for tenants whose incomes are at or below 60% of county median income.

WHEDA awards tax credits to developers who then sell the credits to private investors to obtain funding. Once the housing project is available to tenants, investors can claim the tax credit as a dollar-for-dollar reduction of federal income taxes owed over a 10-year period. The affordable units are reserved for low- and moderate-income households for at least 30 years while other units in the developments may be available at market rates.

Find more detail about the 2021-2022 QAP application here. To keep up-to-date with WHEDA news and information, sign up to receive emails here and follow us on Facebook, Twitter and LinkedIn.

ABOUT WHEDA
For more than 45 years, WHEDA has worked to provide low-cost financing for housing and small business development in Wisconsin. Since 1972, WHEDA has financed more than 75,000 affordable rental units, helped more than 133,000 families purchase a home and provided more than 29,000 small business and agricultural loan guarantees. WHEDA is a self-supporting public corporation that receives no tax dollars for its operations. For more information on WHEDA programs, visit wheda.com or call 800-334-6873.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.